Asset Allocation Strategy

Discussion in 'Investments' started by jabberwocky, Feb 18, 2017.

  1. jabberwocky

    jabberwocky Registered User

    Last edited: Feb 18, 2017
    Hi there,

    I started a thread last last week ("Tax-advantaged retirement accounts, or, a general 15-yr plan") on this forum and got a lot of useful information -- many thanks to everyone here.

    The conversation has changed subject a bit and now warrants a new thread -- specifically, the "optimal" way to allocate assets in a pension fund.

    This thread will hopefully provide some good generic advice, but for the purposes of discussion I'll start by listing out my own circumstances and assumptions.
    • I am going to invest 20% (€14k) of my gross salary (€70k) into an occupational pension, my employer will provide 5%, meaning a yearly total of €17.5k invested
    • I do not need to access this for, let's say, 25 years (I am 31).
    • I am not totally risk averse, and I can handle market volatility during these 25 years.
    • When I retire I want to stay retired (from the "rat-race", running a small business is fine) -- going back to the job market shouldn't be a backup plan.
    Given I am 31 at the moment, I would start off this discussion by suggesting a 50/50 split between world equities and European, and with a low management fee -- my provider has a fee of 0.65% on these two passive index funds, I can go slightly higher but most definitely not above 1%.

    In ten years or so, at 40, I might suggest reallocating these towards a 40/40/20 split between world and European equities, the remaining 20% going into government bonds -- assuming global markets are in a slump when it's time to withdraw, having some invested in bonds seems to be a good insurance plan to weather that particular storm.

    I am Irish and live in Ireland. I am not necessarily looking to retire early or hit any specific figure here -- this is to be a backup for my eventual retirement or my beneficiaries.

    I have other money I can invest on a monthly basis and I am interested in learning more about ETFs and how they work in Ireland (e.g., on a tax basis, and what providers here are worth using), which may affect how I allocate my pension -- any comments on that topic will be greatly appreciated.

    This thread doesn't need to be specific to my circumstances as such, though, I just hope to get some general information on the topic and put it all towards making a decision in the next few weeks.

    Thank you!
    Last edited: Feb 18, 2017
  2. jim

    jim Frequent Poster

    Hi Jabberwocky,

    I found your other thread to be rally enlightening and this very morning I have asked my pension provider to allocate 100% of my pension fund to a global equity - didn't make this decision lightly, it was based on research and an informed decision on my part. The information to be gleamed from this site is brilliant so thanks to all who contribute.

    Similar to yourself Jabberwacky I am in my early 30's and am in a similar financial position to you and am keen to better understand my investment options with a view to a comfortable retirement as soon as possible.

    Based on what iv learned from this site my invest strategy is as follows:

    1. Max out my pension contributions - now set at 20% of my gross salary.
    2. Maintain a €10k easy access regular saving a/c and €2k in my current a/c
    3. Pay down my mortgages by an extra €1k per month once the above 2 objectives are being met
    4. Anything left over will add into my reg saver a/c and fund my lifestyle

    I don't know much about ETF's but I think Davy's have an ETF product.
  3. dub_nerd

    dub_nerd Frequent Poster

    marco likes this.